CHU's 2025 Report Shows Stability in Strata Insurance Premiums Amid Climate and Regulatory Shifts

According to the report, strata insurance premiums have experienced a modest increase of 2.8%, rising from an average of $954 to $981 per lot in the year leading up to June 2025. This increment is notably lower than the 14% surge observed in house insurance premiums during the same period. The relative stability in strata premiums is attributed to the collective efforts of the industry to manage risks effectively and maintain affordability for apartment owners.

CHU's analysis indicates that the affordability of strata insurance has been preserved, with the premium growth rate remaining below the 3.4% increase in household incomes over the same timeframe. This suggests that, despite economic pressures, strata insurance remains accessible for property owners.

The report also highlights the impact of significant weather events in 2025, including Tropical Cyclone Zelia and widespread flooding across multiple states. These events have underscored the importance of climate risk management within the strata sector. Despite these challenges, the Australian Reinsurance Pool Corporation's September 2025 review confirmed that premiums for strata properties would remain unchanged, indicating that current pricing structures are adequate to address the associated risks.

Regulatory developments have also been a focal point, with reviews in New South Wales, Western Australia, and the Australian Capital Territory introducing new requirements aimed at enhancing transparency, consumer protection, and professional standards within the strata industry. These reforms are expected to further strengthen the sector's resilience and governance.

Emerging risks, such as building defects and the increasing prevalence of lithium-ion battery fires, have been identified as areas requiring attention. The report notes that incidents involving lithium-ion batteries have risen, prompting regulators to issue new safety guidelines and strata managers to implement formal battery management policies.

Looking ahead, CHU anticipates that affordability, climate resilience, and regulatory compliance will remain central themes for the strata insurance sector. The report emphasizes the need for continued collaboration among insurers, underwriters, brokers, and strata managers to support and strengthen strata communities across Australia.